"Whether the rate goes up or some of the exemptions are got rid of, that needs to happen," he said

"Western Australia is the strongest economy. It is a very prosperous and wealthy state and all Western Australians accept we are prepared to cross-subsidise the Northern Territory, Tasmania, and South Australia, but there is a limit to that."

States put their case on future of GST

The states and territories are split over the future of the GST, attempting to pull the Federal Government in different directions as they jostle for increased revenue.

ACT Labor Chief Minister Katy Gallagher says she supports the renewed calls from West Australia for changes to the GST to boost revenue for services like health and education.

She is urging her federal Labor colleagues to support the discussion.

"I think if there is to be any rational discussion about the GST, all states and territories need to back any Federal Government that's prepared to examine it and look at whether the rate does need to go up, or exemptions needs to change," she said.

We believe that an increase in GST or applying it to food would impact those who can least afford it.

Acting ALP leader Chris Bowen

But Mr Bowen has ruled out the federal ALP supporting any changes to the rate or the base of the GST.

"Our federal position is very, very clear. No increase in the GST, no expansion to the base of GST to food and other exempt items," he said.

"We believe that an increase in GST or applying it to food would impact those who can least afford it."

Queensland Treasurer Tim Nicholls says he is not advocating a rate increase, but he wants the GST applied to more online transactions made to overseas companies.

"Let's address that low-value threshold which actually disadvantages some of our traders and business people here in Australia," he said.

Mr Nicholls says Queensland, like Western Australia, wants to see changes to how the GST revenue is distributed between the states.

"Over a period of time, we believe that there is a case for the Commonwealth Grants Commission to move to what's generally called an equal per-capita share," he said.

"That would generally see the states receiving back the amount proportionate to their population."

Victorian premier Denis Napthine has refused to support Mr Barnett's call for a boost to the GST.

He says Victoria is being short-changed in the GST carve-up and he is more interested in rectifying that.

"Victoria wants its fair share of the GST. Under the current arrangements we get 90 cents back for every dollar in GST we pay.

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"Queensland, a resource-rich state, gets 106 cents for every dollar they pay. So what we're saying to the Federal Government (is) we want our fair share."

Tasmanian Premier Lara Giddings is worried that any move to change the GST formula would disadvantage her state.

She has written to the Prime Minister seeking a reassurance that he will not support the per-capita distribution method.

"I look forward to working with you to cement this commitment to Tasmania as early as possible," she said in the letter.

New South Wales is distancing itself from the debate.

Northern Territory Treasurer Dave Tollner has called for the GST to remain at its current rate of 10 per cent.

But he called on the Federal Government to review a decision that saw $100 million of GST revenue stripped from the Territory.

South Australian Premier Jay Weatherill says the GST should not be raised and expects Mr Abbott to stick to his pre-election commitment not to change the tax.

He says Mr Barnett's comments are just an attempt to secure a greater proportion of funds for his state at the expense of others.